US bond giant PIMCO predicts the Federal Reserve will begin lowering interest rates in mid-year, with a more gradual easing cycle in the US.

PIMCO prefers bond markets in countries like Australia, Canada, and the UK due to lower inflation risks.

The US has maintained strong momentum, with supportive factors like larger stimulus programs, higher budget deficits, and artificial intelligence.

PIMCO anticipates a “soft landing” for the US economy, where high interest rates reduce inflation without pushing the economy into a recession.

However, persistent inflationary threats remain high in the US and recession risks remain a major issue elsewhere.